Sounding the retreat

Moody's Investors Service shocked the hybrid securities market in November when it proposed downgrading non-cumulative instruments. But industry pressure has forced the rating agency to scrap its proposals. Pamela Tang reports


Moody's Investors Service sent shockwaves through the growing Asian hybrid tier 1 securities market - valued at $4.85 billion in US dollar markets in Asia excluding Japan - when it proposed on November 20 downgrading non-cumulative instruments. These instruments are popular with fixed-income investors because of their low risk profile and stable coupons. And the value of tier 1 securities is expected to grow significantly in the next few years, as they represents a cheap form of funding for many

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